pencils because if you didn't know, we are headed in to the heart of earnings season. this morning we'll be hearing from cat pill what are, freeport, hasbro. after the bell, texas instruments and yahoo! among many others. as of friday, earnings for the s&p 500 were expected to be off. 1.8% for the quarter. earnings news maker is caterpillar ceo, joining us at 8:00 eastern time. joe mentioned the markets and friday's tough finish to stocks. the dow dropping more than 200 points during the session. but the major indexes did hold on to small gains for the week. and check out the calendar. two day fmoc meeting beginning tomorrow. wednesday, new home sales. thursday, we get the weekly jobless claims, durable goods and pending home sales and friday consumer sentiment, so a huge week and it all wraps up with the first quarter read of third quarter gdp.

that number will be watched closely. our squawk market master this hour is marc faber. he'll be joining us onset in just a moment. in fact i think i see him making his way out now. also politics are on the agenda today, as well. we have the third and final presentation debate set for tonight in florida. that final 90 minute showdown will focus on foreign policy. bob schieffer of cbs will be moderating. you can watch complete coverage right here on cnbc and of course the cnbc twicker will be live. right now let's get you up to speed on this morning's top stories. >> making headlines this morning, spain's prime minister getting backing for his austerity drive. the vote removes a potential obstacle for him asking for a

bailout. the timing of any spanish bailout is still uncertain, of course, and we'll have more from ross westgate in just a few minutes. japan's exports tumbling by 10.3% in the year. sharpest decline since the aftermath of last year's earthquake. meantime bank of japan is cutting it outlook for local regional economies due to a fight with china and weak global demand. and bp says it has not yet reached that agreement on the sale of its 50% stake in tnk. bp and rosneff reportedly preparing to announce a deal worth more than $25 billion. could give the british oil company a stake of between 16% and 20%. we've been waiting for that transaction to cross the tape, but it has not been announced just yet. mr. kernen, how was your weekend? >> it was good. i read the top date on on the journal and i checked the date. almost reads identical to last week. i was excited the first time and

actually just as -- >> how excited? >> i was so excited i have a lot of it was so hot that -- but i don't have any it was so excited. but could i come up with something. probably be dirty, though. so let's not. corporate headline, ancestry.com is reportedly set to be acquired by an investor group being whether he had by a european private equity firm. the "wall street journal" puts the price at $32 a share or $1.6 billion. why isn't deal book reporting? >> i'm not sure. i don't know. >> so you're make fun of what we're leading with. >> newer a no win situation. >> i'm losing. and the's only 6:03. >> how about archer daniels

midland is bidding for grain corp. >> according to who? >> not deal book. i'm not going to attribute this to anyone. i just know this one. according to me. the deal comes at the time of consolidation in the global grain sector. you know, australia is considered a coveted market due to its stable policy are a fweem and its good licks to asia. and then nissan is recalling certainly models for 2012 and 2013 altima. have you ever gotten an altima with the ron day rental? >> no. >> when you drive to pilates or something? >> i drove a gmc aurora or something. >> why? >> i went to sesame place yesterday. >> and you rented a zip car to do that? >> no, national alamo.

>> you know what, i'm glad you went because we're going to shut that whole place down. sesame, done, finished. didn't see it coming. >> henry loved it. max was a little scared of big bird, thenhenry loved it. it was something. >> no kidding. >> one heck of a sunday. >> that's so funny you have to rent a car to -- >> it's a block away, so i just literally -- it's easier than having one in the city. >> if you had one, you'd probably be parked further away. >> about these altimas, do you know what was happening? >> the steering wheels. >> not only that. the bolts could come loose and fall out and you know what that would to. >> yes, you could lose control of the car. >> and it could increase the

risk of a car crash. >> but it's not the bolts that are the problem, its he improper torque. >> i don't drive car, i drive motorcycles. but bolts will come off sometimes. >> do you have a side car? >> for you i will get one and take you around the north of thailand. >> just knowing you, i figure you'd have someone in that side car. >> i have racing bikes. >> let's get a quick check on the markets. they's looking to rebound after the big dip on friday. dow futures up by 20, s&p up by about 2, oil prices at this hour are indicated up by about 53 cents. lundberg survey, gasoline prices down by about 8 cents. so starting for see big drops. take a look at the ten year note. yields 1.798%.

that's right around where we saw it on friday when it did finally push back about 1.8%. the dollar down against the euro. up against both the yen and the swiss franc. and if take you a look right now, gold prices are up just barely. >> it is time for the global markets report. ross westgate standing by in london. >> very good morning to you. looking a little bit better. over two hours in to the trading day. three hours. pretty even stevens. last week despite what happened on friday, not bad. ftse 100 nearly up 2%, cac up 3.4. numbers a little firmer for the ftse, the dax and cac. phillips a key stock, up 4%.

effectively beat expectations with third quarter figures across all its three main business units, health care, lighting and consumer electricals, as well. but they were slightly more down beat on the macro environment and seeing a down turn in the north american consumer electricals market. also something that was shared by ewhether he can troe lux as well today. so they are worried about the macro environment. the world is a riskier place as we wait to see what happens with the election and fiscal cliff. europe spanish yields slightly higher, but you have to remember towards the end of last week, we sit 7 1/2 month lows. these are the bourses. we'll go straight to bond yields if we can. this is where we stand. ten year spanish yields a little bet higher.

rajoy did get through regional elections okay. at the moment no sichb him necessarily asking for any financial assistance. they'll try and get through an election in catalonia. so no real fresh on asking for assistance at the moment. berlin seems to be back pedaling on getting any money to recapitalize any banks up after the elects next year. quick look at euro-dollar. 1.3054. dollar-yen is firmer. pretty poor trade data out of japan today. and there are thoughts we might

be flirting with a recession again in japan. we expect more monetary stimulus out from the bank of japan fairly shortly, as well. that's where we stand in european trade. >> in studio today, our squawk gnaws maker not normally the case, usually he could be anywhere, hong kong, tie land. marc faber is editor and publisher of the gloom, boom and doom report. let's start in europe. and you are row regions combined debt burden, numbers are out, surged today. highest level since the euro was introduced. 87.3% of gdp, that includes greece 170% of gdp, italy and portugal 121%, eu debt to gdp limit which they will strongly enforce is 60%. so they have all these numbers that they have, but no one's in compliance with any of them.

>> no government complies with anything. >> especially -- is this representative of what the globe is facing? similar to anything here in u.s.? >> it's similar. it's a symptom of western societies, democracies that have overspent where essentially debt has gasoline in the private sector level. and it always depends what you use it for. i remember in the 50s and 60s, they had high ratios because they invented a lot of money in plant and equipment and infrastructure. that's a different story from borrowing to spend in other words for consumption purposes. borrowing for consumption purposes advances consumption to today which would have taken place tomorrow anyways.

and that house hold debt once it becomes guess sexcessive, it ca grow anymore. nobody lends you money and automatically you have structurally weaker future growth. >> so you're in the business thousand. of a quoted thomas jefferson and you are now, too, this happened -- this is all the way back -- this is a long time ago, this dude said the abuse of buying and selling votes crept in and men began to play an important part in determining elections. later on this process of corruption spread to the law courts and then the aerl and finally the republic was subjected to the rule of emperors and then thomas jefferson, the issue today is the same as either's been throughout all of history whether man should be allowed to

ghofrn himself or be ruled by a small elite. why did you decide to tell our pre-interviewers these would quotes? >> because history kind of repeats itself. in democracies, you start with good intentions and then pow every becomes polarized among a few people. and eventually you have either huge changes in peaceful fashion through reforms or usually revolutions. >> where do you think we are in the u.s.? >> we're not at the revolution, but getting closer. we're moving in that direction. and the same in europe. i think the regimes will try to keep the system alive as it is for as long as possible, which means there is no fiscal cliff. there's a fiscal grand canyon. neverndi never ending deficits because you have to feed the population with all kinds of hands out whether a republican or a

democrat. and so the debt burden will continue to go up and one day the system breaks. >> is that 5, 10, 15, 50 years? >> i think the time frame would be within five to ten year, you have a colossal mess. >> hear, europe or both is this. >> everywhere in the western world. we had the cries is 1997, markets went down 90%, currencies collapsed and there was no intervention by the new keynesian. the system deleveraged, the private sector tightened their belts. government spending was cut and it was painful for a few years. but now we have essentially again a boom. >> and you think your rottweilerss will be enough for you? how many do you have? >> well, i'm a peaceful person. the problem is our drones.

>> do you have more than three? >> yes. four. >> do they respond to german commands? >> they don't listen to me. if i tell them shut up, then they shut up. >> if you tell me that, i will. everything will be fine, don't you worry. even though you walk outside and someone pushes you on the subway rail, but -- >> you're talking five to ten years. this is some serious -- a simpson-bowles type plan, is that enough in. >> i think the deficit here irrespective of who is in the white house next year will stay above a trillion dollars per annum or at least as far as the eye can see fp whether mr. bernanke is fed chairman or somebody else, there will bemoan

printers. because actually the doves at the fed, most of them, they make mr. bernanke look like a hawk. like a hawk. >> you were early on qe 15, 16 and 17. >> why yo yes. >> yes, but we have now unlimited. >> and you're also talking about regulation and how that has increased to the high he is levest levels. >> somebody told me natural gas is a game changer.he is est levels. >> somebody told me natural gas is a game changer.e is est levels. >> somebody told me natural gas is a game changer. is est levels. >> somebody told me natural gas is a game changer.is est levels. >> somebody told me natural gas is a game changer.s est levels. >> somebody told me natural gas is a game changer. est levels. >> somebody told me natural gas is a game changer.est levels. >> somebody told me natural gas is a game changer. that's why the the u.s. market has outperformed any or market. >> the stock market has outperformed because of natural gas? >> the view is this. you invest in america, america is less bad than europe and asia a okay. but they have underperformed the u.s. by and large. china and japan. now, one of the reasons is they say the u.s. will become energy

self-sufficient in five or accept yeseven years and natural gas will lead to a competitive advantage for the u.s. yesterday i arrived at kennedy so we go through immigration. i waited 2 1/2 hours in front of immigration it get through. you think that will gas will change any of that? this is ridiculous. the problem is we have not only in the u.s.,s also europe bureaucracies that are far too big. my medicine is reduce government by minnesoutimum 50%. people say are you crazy? >> i'm not going to say crazy, what's the impact of doing that now? >> immediately an improvement in the economy. immediately you would reduce regulation. >> government helps the economy,

andrew. it's great. >> you take all that money out of the system overnight, you have problems. >> you're a nice person, you're young. i'm sure you never read milton friedman's book capitalism and freedom. >> yes, i did actually. >> i recommend you read it once again because it's very short to read and it contains a lot of very interesting and valuable points against the intervention by government. in particular he says there is no evidence whatsoever that increased government spending leads to actually an improvement in the economy. >> when you think about it, for the government to spend, it has to tax the private sector to get to the money that it needs to spend, right? i mean -- >> it takes the money in tax revenues away and hires people to better you more. >> 50% overnight would be pretty severe just in terms of the jobs market. not arguing that there needs to be cuts across the board.

can it happen more gradually? >> yes, in three days. one after the other. believe me, the economy would recover right away. these people have to go and look for jobs. >> military for everything? >> across the board. >> there was a time not so long ago at the turn of the 20th century we were at 8% of gdp. >> that's the point. and the economy 1870 to 1920 had very strong growth rates on a real per capita income gains. but we have a period of deflation, but the standards of living increased dramatically. but look, we're here to talk about investments. and the economy is one thing, the government is another story. with a we're interested in is are markets going to go up or

down. and i believe we have this huge outperformance by the u.s. four months ago, some european markets bottomed out. greece, italy, spain, france, portugal, they were four months ago at the 20009 lows or everyoe lower. since then and i recommended at that time to buy and i vote for the first time in my life european stocks which i hate to do, but i did it simply because the valuations were low. since then, greece is up 65%. now, i'm looking at asia. in asia, thailand from the 2009 lows is up 250%. other markets like the philippines, indonesia, malaysia, singapore, are up by a similar amount. china was at 6,000 index, in 2007 we're at 2000. i think china and japan could have a rebound here. if greece could rebound by 65%,

the greatest garbage can rewound by 65%, believe me. i'm not necessarily saying that chinese economy is improving. on the contrary, it's worsening. but you understand the asset al he low indicate as they see this market up and that market down and suddenly money shifts. >> y >> how about here? >> i think here we'll go down 20% from the recent top at 4070. >> why? >> the technical position of the market is poor and the corporate earnings are worsening. and i believe that if the statistics were precise, which they aren't, because if you measure gdp and then you have a price deflator, it depends how you cam could you late the price deflator to determine real gdp growth, i think there's hardly any growth. i'm not debating that the housing have i is improving, but

other industries are worsening. >> so you would fight the fed. >> well, let's put this way. i think the federal reserve and fiscal policies, not just in the u.s., have been destabilizing than stabilizing. the idea was you smooth out the business cycle, go up in the excursion of, you release a little bit. so you smooth out the business cycle. but monetary and fiscal policies in the u.s. in the last 0 years have aggravated the ups and downs of economic swings and of course of financial markets. you have much more volatility. >> would you call -- you saw karl lagerfeld called hollande

an idiot. is that too strong a word? interest why like to call people idiots because maybe we're all idiots in the financial sector. so why not. but i think he's probably also kind of an academic. and -- >> like a law professor? >> yeah, something like this. and i believe that his policies are misguided. but a friend of mine, he says, marc, each time the socialists come in, the stock market goes up. >> happens here sometimes, too. marc, thank you very much. >> great to see you. >> what are the names of the four rottweilers? >> i call them all boss or mia. because in thai, we have the big wife and the small wife. >> thank you. great to have you in the studio. >> would you sell europe now or

greece particularly after it's up 65%? >> yes. i think i wouldn't buy it, but on a setback of say the market has rallied say 30% to 65% in these european markets, now i expect a correction but no new lows. i think you made four months ago so-called secular low. like i believe trowel 9 in the u.s. s&p, you're not going to revisit anytime soon. simply because if you throw money at the system, you support asset prices pp equally. i was in london the other day, may fair. the same here. luxury properties, they're not going to collapse. they may go down 20%. but look, sandy weill bought west 15. this 2007, he sold it now for $88 million and he call immediate up the other day and said, listen, you're always on cnbc. tell joe there is a condo for

sale $95 million. so if you want to pay it, you're welcome. >> if he give me the mortgage. >> marc, thank you very much. >> my pleasure. when we come back, the drop at the pump. and then later this week, don't miss warren buffett, he'll be live for two hours 7:00 to 9:00 eastern wednesday.

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welcome back to "squawk box" here on cnbc. making headlines, the average price for a gallon of regular falling more than eight cents during the past two weeks. now averages $3.75 a gallon.

among the ropes feasons decline in crude prices and low seasonal demand. what, the sleeleaves are fallind expecting cooler? i don't know. maybe we expected it not to happen. >> backers of lng are launching a major campaign to press lawmakers to allow the sale of more u.s. gas abroad, that effort being led by the center for liquified gas. the group is hoping to make the case that selling the nation's surplus natural gas to foreign countries will yield significant economic benefits and not drastically raise prices. this is something we were talking about about with faber who beings naturthinks natural markets have increased. not illegal, but only one place that you can have the lng come through. one of those stations. and the man who led the

restructuring of aig is circulating a plan now to similarly unwind the government's ownership in the company. jim millstein has a proposal out that would allow the government to receive pay back on the bailout and create a more market based competition. he saysly wi date investment portfolios, remove the company's government guarantee and shift the guarantee to the mbs they issue. and perform a recapitalization allowing for more profit retention on the part of fannie and freddie. while we're at it, did you see this? this is the cover of new york magazine. it says aig ceo, you're welcome, america. it's a remarkable piece because it's almost flipping the bird to the whole country and to everybody in the country saying we made the money back, say thank you, please. >> it takes a lot of his

language and lays out where he sees the political campaign season kind of coming around. he doesn't mince any words, but you have to wonder if this was edited at all or written at all -- >> in the post it says taxpayers shelled out $82 billion to save his failing company and now he wants -- >> it wasn't his when it was failing. he stepped into turn things around. >> if he does turn it around and pay the fed all the money back, i can see what he's saying. >> he was the guy who turned it around afterwards. >> he says nobody's ever said thank you. we've done all the right things. somebody should say, by goalie, these aig people made a plom and they're living up to their promise. we're left with a major part of the economy in america and we're going to make a profit on top of everything else. he says god bless america, god bless aig and god bless tiny tim, as in tim geithner, for

approval proving the original transaction. but the writer says gratitude of this kind is unlikely to be forthcoming. but maybe it should be given what's happened. >> he's not the guy fwhowho was charge and it doesn't lay it out. on saturday, the "new york times" reported on the united states and iran have agreed in principal to hold one-on-one negotiations on iran's nuclear program. but the white house quickly denied that any talks had been set. this report of course came just days before tonight's foreign policy debate with president obama and mitt romney. >> great editorial piece in the journal about how that came about. some senior official obviously said that a tempting october surprise.

talks about not just in that instance, a movie about how to-to-cheat on your wife where you're this bed with a woman, your wife comes in, you just keep denying as the woman gets dressed, you get dressed, your wife keeps say whog is this woman, what are you doing, what woman? until she finally leaves and then five minutes later the wife just gives up and says what do you want for dinner tonight. but that's typical of what we've heard for the last 3 1/2 years. >> tonight is the big debate. it will be focused on foreign affairs. and they've already put out a list of the topics he wants to get to. so i don't know what new will happen tonight. they'll be sitting at a table. this might be more calm. they won't be walking around. also there was a new photo that's been released of fidel

castro. seen holding up the photo of castro, he says he met with castro on saturday for five hours. rumorsed swirled over the health of the 86-year-old castro. in an article today in state run media, castro krit scriticizes health rumors and says he doesn't even suffer from a headache. >> u.s. political gnaws, a new nbc news wall street journal poll is out and finds president obama and mitt romney are deadlocked at 347% among likely voters. and i think this was conducted after last tuesday. romney gained three points from where he was on the last poll. >> if you go back a month, he's up from being down seven in that poll. >> up like seven on a gallup poll. i don't know if we're allowed to mention gallup or not. >> you can mention gallon will you please. let's talk about greg smith.

his tell all book goes on sale today. he began a media blitz on 60 minutes last night. >> this might be hard for people at goldman sachs to understand, but i loved the place. i put my heart and soul in it. i didn't view it as a betrayal. i think the leaders today don't have the long run interests of the institution at heart.idea of the op-ed was not to do any destruction. >> i think some people aren't going to believe that. to not give notice to a company you woorkrked for 12 years and say in a public way saying they're going against all the values that they once held, how can that not be seen as a betrayal? >> well, it's true. i mean, i think the company is going against the values it once held. >> becky, you watched this last night. >> yeah. it was -- i don't get all the hoopla. >> gem stewart wrote in his

column saying a tell all gold man has little worth telling and having read the book, some people calling this guy a muppet now. >> you didn't 150e tsee the fi ? >> i did, but i was curious -- >> are you willing to talk about that his next book is coming out? >> so two things. josh brown wrote two things. he says greg smith readies why i left quiz knows for 2017 release. and then he writes greg smith, and then this year item while at gold man, i learned we weren't running ing ning a doll hospita bird sanctuary. i misread the breochure. anderson did a good job asking if you had paid more -- he asked

him for a million dollars. >> do you know anderson cooper? are you on a first name basis? >> i've been on his show a p couple times over the years. >> on the mole? >> no, back on 360. >> wasn't he the guy on the mole? >> that's where he got his start. >> amazing race or something? >> i think it was the mole. >> you you weren't on the mole. >> i was never on -- do you think i -- >> no, you said one of his shows, i didn't know which show you were talking about. i think he got his start on the mole but he doesn't want anyone to know that anyway. where are we going? >> let's check the markets. we've been watching this morning the futures have been stronger. in fact this is coming after a big loss on friday. right now the dow futures up by about -- modest gains, but nasdaq up pie by 0.3%. but gains after big losses on friday. in europe, there are green

arrows in france and london, but these are again modest gains. you can see the german dax down just slightly. in asia overnight, the markets ended barely higher, but you can take it as a victory after watching what happened here on friday. the hang seng up by 145 points. energy prices continue to climb. right now oil prices up by about 63 cents. ten year note, yield has come down just slightly. 1.799%. and the dollar stronger this morning against the yen, but down against both the euro and the swiss franc. euro at 1.3066. gold prices are up just slightly. right now gold at $1725.70 an ounce. >> if you have comments, questions, squawk@cnbc.com. coming up, your business traveler's forecast. plus a few early morning stocks to watch.

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welcome back. u.s. equity futures are indicated a little higher. dow by 20. also we should bring you this news. hasbro reporting quarterly results. earnings come came in at $1.24 a share about. revenues roughly in line. sun trust earnings came in $1.98. that beat the street by 12 cents. >> in sports news, there will be a seventh game. giants really good thumb the cardinals early and often last

nine. 6-1 in san francisco.pb the cardinals early and often last nine. 6-1 in san francisco.thecardina last nine. 6-1 in san francisco.the cardinals early and often last nine. 6-1 in san francisco. the cardinals early and often last nine. 6-1 in san francisco. tonight's winner will host the tigers and that will start on wednesday. and the new york fans, well, you'd never call them fair weather, they want a-rod's head, they want swisher gone. have you seen the covers of the new york papers? >> yes, i have. >> there's a reason you're paid a lot to play in new york. >> a rough market. >> sunday night football, things are back to normal in cincinnati as far as cincinnati sports. the reds are done, bengals stink, steelers who aren't very good either, bear cats lost. although rutgers -- bengals 24-7. third straight loss. this golf news, saint isimon's

island, coming from behind to win it all. he was followed by david toms and furyk. >> how do you feel about wearing two gloves? he's wearing two gloves. >> i know you go out at night wearing one glove. i think that's a little weird for me. >> the whole mj thing, i know. >> but he wasn't wearing a surgical glove. that's weird to see that the way you snap it sometimes. anyway, the team improves to 7-0 this season beating temple 35-10, the scarlet knights ranked 15th in the bcs poll. notre dame met byu. oklahoma was a great game. did you watch the running game of notre dame? >> i did. >> is the defense big enough to handle oklahoma? and animal orchestra didn't pick

this grecco pick -- >> i tried to e-maille you, but it's full so i couldn't send any e-mail so i had to tweet you. i said nice pick for the ao. because it was such a terrible loss. >> and then my wife, she went to fc and i went to colorado. she said i'll take sc. fine. give me 40 points. it was 50-6. 30 poi 40 points and i still can't win. my sports teams are just really -- >> you're having a bad year. >> and my high school team lost for the battle of ohio. go ahead. it is now time for today's national weather forecast. alex wallace joins us from the weather channel. alex, i think beyond the weather, you might have some

special news for us. >> yes. first day back. i just came back from getting married. >> that's nice. >> that's great. we missed you. >> jessica biel marys timberlake and -- >> i hope it's worth it. you're on tv. i'm sure she's a great girl about. >> no question about it. >> cashing in your chips early. >> thanks, guys. we're tracking some storms this morning right here in the middle of the country. cluster of storms here impacting iowa as well as missouri. this is all going to track towards the north and east eventually getting into places like chicago. not going to reach us on the east coast. beautiful day. 60s, 70s and sunshine across the east coast. but it's across the midwest, great lakes, where we'll watch some storms begin to move in. very warm in the southern plains. dallas for you, 88. western half of the nation, this

is where it will continue to stay cool. showery, even a little wintry for some cases here across the higher terrain. it's all to a big dip in our jet stream allowing for the cooler canadian air to remain in place. that will keep snow around the mountains and wet along the coast, san francisco a wet day there, while the middle of the nation we've got the warm weather here. temperatures will be 10, 15, 20 degrees above average here as we head through the early part of the week into tuesday. returning to more late summer temperatures, wichita 88 for the afternoon. thank you. back to you. >> congratulations again. >> thank you, thank you so much. >> he looks exhausted. anyway, coming up -- just kidding. he had no sleep. coming up we'll flee to the set and head to the chairs, the stories that have us squawking this morning and programming note, don't miss warren buffett on "squawk box" this wednesday morning starting at 7:00 eastern, a lot of things, the

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oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now srs. [ male announcer ] fedex office. between listening to the numbers... ...and listening to your instinct. duff & phelps finds the sweet spot that powers sound decisions.

duff & phelps financial advisory and investment banking services. it's you and me outside. >> oh, really, old man in. >> just the two of us, no secret service. >> in that case you better bring

your mormon magic underpants and your wife's dancing horse because when i play, i play for capes. >> let me at him, dad. >> sit down, tag. not now. >> that was "saturday night live" this weekend. i went to the dress rehearsayal this weekend and you got to see how they change the jokes even with, you said you had been to one, this is what 20 years ago. it was fascinating to see how they tweak the jokes and within an hour they had cut half, not half but maybe a half hour's worth of programming, tom hanks was sort of, made a couple cameo appearances and bruno mars was performer and the host. can you be the performer and the host? he did both. not the funniest guy in the world but hell of an entertainer. >> 1979, so that was 35 years -- 34 years. "snl" has been on -- when i saw it, the guest host was bob

newhart, and bill murray was still on and i talked to him. >> you talked to bill murray. >> i told bill murray i saw that and i was looking down from the stairs. >> do you like this new obama? >> i liked the other one better. what happened to him in. >> they switched him out. >> you know, andrew, 11:30 -- >> too late for you. it's not -- >> that's why i went to the dress rehearsal at 8:00. >> that's more my style. that's more my style. >> very quickly let me show you guys this chart, actually we'll show you later, i think we have to go. this is a chart for social security. i'll talk about it later. john harwood joins us with the latest nbc news poll and the stories behind tonight's final presidential debate. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused.

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markets in focus. investors gear up for a big week of earnings and economic data. stay ahead of the game to find out what's working right now for your portfolio. rising above and finding solutions, las vegas sands president and coo michael leven on what he's seeing as major growth drivers for the economy. and it's a battle for the top tablet. find out which company has the edge with investors as the holiday season is just around the corner. the second hour of "squawk box" starts right now. ♪ good morning, everybody. welcome to "squawk box" on cnbc. i'm becky quick along with joe

kernen and andrew ross sorkin and we do have a big week lined up for the markets, a two-day fed meeting, earnings galore and slow progress made in europe to try to fix the debt crisis. we are covering it all with barclays market guru barry knapp and wells chief economist john silvia. at 7:30, lv sands coo michael leven will talk to us about business and politics and the changing face of computing, a closer look at tablets and their makers and find out which company has the upper hand and ceo doug oberhelman, its eight a big morning you can't afford to miss. tech earnings take center stage, a quick look at the futures setting up the week the dow would open up 20 points higher, nasdaq as well as the s&p 500, including a down day on friday but ended up relatively flat for the week. here are your morning headlines.

the average price for a gallon of regular gasoline in the u.s. fell more than eight cents in the past two weeks, average price $3.75 per gallon. the news is welcomed after a month-long period when gas prices averaged around $3.83 per gallon, the highest prices for gasoline was october 19th survey in san francisco by the way at $4.50 a gallon. japan's exports tumbled by 10.3% in the year to september, that's the sharpest decline since the aftermath of last year's earthquake. meantime, bank of japan is cutting its outlook for local regional economies due to a fight with china and weak global demand. bp has yet to reach an agreement on the sale of the 50% stake in russian venture tnk. they are preparing to announce a deal worth more than $25 billion, we've been talking about it for the past i feel

like week, could give them a 16% to 20% in the company. i saw a shot in the preview where harwood was standing, looked pretty nice. the latest nbc "wall street journal" poll showing mitt romney and the president are tied, john harwood is in boca raton, florida. >> is he wearing shorts? he might be. >> he could. that's a preppy look, tie, jacket, and shorts. i wouldn't hold that against you if you were, john, but you'll be up late again tonight and on early tomorrow so you'll earn your pay down there. >> reporter: i got pants on joe. >> okay. not magic underwear, i would imagine, right? we just had that in the "saturday night live" skit that andrew ran in the chairs, saw that thrown out. yeah. >> reporter: i didn't see

"saturday night live" but i did see the nbc/"wall street journal" poll and dead heat race, 47-47 among likely voters. obama has a five-point lead among all voters and that accentuates how important turnout is to deciding what's going to happen in this race, both sides are working very hard here in florida, many other places to try to maximize the efficiency of their vote, to try to find every possible supporter and then get them to the polls and that's what the last two weeks is going to be about. we have a foreign policy debate tonight, probably will have less viewership than the previous debates because it's on foreign policy, which is somewhat less interest to voters and also because we got a seventh game of the giants and cardinals tonight. >> it's weird, john. i'm not a representative of the rest of the country but have you noticed that each debate, i don't know, the first one, then the vice presidential, then the next one, they've become less, i

don't know, less able to move the needle i think for some reason. we'll see. you never know, it can be one line or one sigh or whatever i guess. so you never know, but it just seems like it's -- >> reporter: well i do think in a race between a challenger and an incumbent the challenger has his greatest opportunity to move the needle in the first debate because he's not as well-known as the incumbent and mitt romney appeared to get a pretty good bump out of that first debate, but the lesser, you know, they're diminishing returns as you go on. the goal is to always try to preserve your momentum and keep moving, but we've got this thing really locked in at a very, very close race. president obama may still have a slight advantage in the battlegrounds but we've got two weeks to go and it's the stakes in a mistake tonight would be big. >> when they settled on the format three or four months ago for these debates i guess at that point the obama people

thought wow, foreign policy, osama bin laden, this is going to be great and no one knew about benghazi until september 11th. >> reporter: well right, that introduces a new complication. one of the things we saw in our poll, two things behind romney's move up to obama. he reasserted who can best lead in the economy. the second thing is romney has become competitive with the president on who can serve as commander in chief. obama has a three-point lead that tells you that the challenger reached a point of acceptability on that issue and one of the factors in that may be the libya controversy, because we saw by 36, i think 39-26 that americans thought that that attack could have been prevented rather than being something that was just going to

happen anyway, that suggests that the president has taken a little hit on leadership in foreign policy entering this debate. >> it's like no state -- not any state, i don't expect romney and ryan to be out in california but even pennsylvania now, they send paul ryan there and the president is still going to north carolina. no one is creeding anything at this point. >> chuck todd points out colorado is probably the swing state that gets the least respect. he was tweeting about this over the weekend because it's hard to get there and so it doesn't get as much attention. >> the football team really sucks this year. right, john? >> reporter: but really look, guys, for florida, ohio and virginia, those are the key swing states. romney has gotten an advantage in florida. looks like we're tied in virginia, obama slightly ahead in ohio, republicans believe that romney needs to take all

three, and he's close enough that that's plausible. >> all right, john. thanks. we'll see you and we'll do this again tomorrow morning. debate coverage starts here 7:00 p.m. on cnbc, the twicer is live, #cnbc2012 and for a chance to see your twit in the twicker. >> a quick note we just said that the bp deal had not crossed the tape, and as we were saying that, it crossed the tape so there it is, bp agreeing to this joint venture with rosneft. it is a big deal. there's some conditionality worth mentioning. signing of definitive agreement is still conditional on the russian government agreeing to the sale, so we will have to wait for that piece. coming up next on "squawk box," we've got a big week for the markets, including a two-day fed meeting, earnings and

economic data that will be potentially market moving. we'll preview the week ahead and tell you what's working now and coming up at 7:30 a.m., las vegas sands chief operating officer michael leven will join us for the remainder of the program. "squawk" is back in two minutes. >> this wednesday a special "squawk box" event. warren buffett on the economy, the election, and avoiding the fiscal cliff. two hours with one of the world's richest men, buffett, "squawk box," wednesday. starting at 7:00 a.m. eastern. rise above.

welcome back. it's official now, lance armstrong has been stripped of all seven tour de france titles and banned from the sport for life. today the international cycling union ratified the united states' anti-doping agency's sanctions and we were talking off camera whether andrew -- >> does he ever admit it? >> i don't know. >> is there a book in this ten years from now, does he go to his grave with this?

>> somewhere there's 1,700 people he got an extended standing ovation. >> the live strong 15th anniversary. >> what do you think they were -- >> he did raise tens of millions of dollar for people for cancer, did it under false pretenses. >> when you deny it, if you're wishy-washy or not a complete jerk when you're denying it it's not as good so part of the denial is just being a miserable like person. what? >> just part of it is being a miserable person? >> part of the denial to make it seem more, like you're more outraged by -- >> by the implications. >> it doesn't look good. whatever. >> you were saying barry bonds never admitted it, roger clem s clemens. >> we want our athletes like in football and baseball to be warriors and we expect them to come back after a week of having an injury and i've heard some

people i know in that business i respect that say you know don't be too quick to judge when people do, and armstrong probably thought everybody was taking their blood out and enriching it. >> the way he was doing it sounds -- >> i know, i know, but if -- >> sounds like he was the main driver in all of this. >> i don't know. better not to judge probably. i'm not going to judge. >> i don't believe you but that's okay. >> we'll judge on air. why don't we talk about the markets. big week waiting for investors, earnings from caterpillar, yahoo! 3m, united technology, boeing, and united technologies. barry knapp is barclays capital head, and john silverman welcome to both of you. earlier this morning we were

talking with mark farber and he has a dim outlook on the u.s. market which he says could drop 20%. he's concerned about corporate profits slowing down. you have a much brighter outlook in terms of what's going to happen to u.s. stock. why don't you explain how you see it playing out. >> sure, i listened to most of that interview until i hit the lincoln tunnel and it was, you know, he made a lot of really sound points. the corporate earnings outlook has decelerated massively. when we originally set our price target this year, based on the rate of change of earnings growth and under the multiple we should be 100 points lower than we are right now. we thought we would get some degree of optimism into the election because that's almost inevitable, elections breed optimi optimism. last year europe rallied when the greek, italian and spanish governments changed hands. it was unfounded that optimism but that for us along with the

fed is the reason we got to the levels that we're at. if we had to rely just on the corporate earnings outlook and we don't get any improvement in business confidence, we don't start to end the capital strike that we're in right now, you know, we could have a fairly substantial sell-off. for me it comes down to what's going to happen on november 6th and are we going to get an outcome that gets us past the immediate hurdle of the fiscal cliff and then gives us optimism that we can do pro-growth tax reform, entitlement reform and really get the bounce in small and large business confidence that restarts capital spending because you could see last week through tech earnings, and industrial earnings that the u.s. is where the weakness is right now on the capital side, and it just really deteriorated badly. >> you say this matters on election day. what happens the day after election day when you see who has won or hopefully we know who has won at that point. >> last week in "the washington post," barack obama said he will drive us off the fiscal cliff if

he doesn't get his way on the upper income tax bracket. that upper income tax bracket is all about a small business income tax cut because of how many file at that level, so that for me, the nfib small business survey is already at recessi recessionary levels. if barack obama wins and drives us off the fiscal cliff we get a negative shock and go the other way. if mitt romney wins, he will be elected with a mandate to do pro-growth tax reform. small business will bounce undoubtedly like it did in 2010 and we'll have a potential way out of it provided we get into 2013 he can work with the congress and get something done on the tax reform side. so for me it's pretty, you know, it's just one or the other at this point. we're either mark farber is close to the truth or we can get a decent bounce going. >> john i know you look at the fiscal cliff and probably pretty

worried about what happens. do you think that it's going to matter who's elected in terms of whether or not we go over the fiscal cliff? >> i think it will matter and the composition of congress is going to matter as well, becky, when you're looking at the data. clearly corporate profits growth has slowed down the last two years, looks like corporate profit growth going forward is again slowing down once more and i think when you look at overall economic growth you've probably done 2% gdp growth for the last three years. when you're looking at the ifisical cliff and who gets elected it is going to matter and our expectation is that whoever is president, whoever runs congress on the senate and the house will come to some reasonable compromise, realize that the fiscal cliff is negative for everybody and will move forward, but our best case is that there will be some type of compromise even if it's just kicking the can down the road. >> you think that happens no matter who gets elected? >> we expect no matter who gets

elected the compromise will go forward. i think both sides realize that the blame can be -- there's plenty of blame to go around if we go over the fiscal cliff. >> the biggest number we get this week that people will put in the context of the election is the gdp number we get on friday. >> sure. >> what is your estimate, 1.8 and 1.9? >> we're a little bit below, more like 1.5 and when you go through the numbers what you'll see is consumer spending still contributing to overall growth but if you look at the business fix investment, that is slowing down and also, becky, there's always this discussion, we've had this before, the balance between final sales and inventories. it looks like final sales is slowing down, inventories are picking up. that's not a good balance. it doesn't suggest reacceleration of the economy going forward. that may be bothering the stock market as well. >> barry, if we actually get a 1.5% number like john's expecting for gdp, what does that do to your target, for the end of the year? what would you do?

would you change it? >> no, probably not. we've been on the low side all along but i think john really hit on a great point and you know, i wrote about this a while back which i described, i wrote a report called truman's third term and what happened in 1948, going into an election, was the housing market was getting better, consumption was fine but business confidence was weakening substantially as harry truman ran on a platform almost identical to barack obama's. after he was elected, we went into a capital spending bust recession. it wasn't a deep one but we went into one and so this question about whether they would compromise in the fiscal cliff would drive us off or not is a big one and truthfully for us, it's whether we can get a deal done in the short term to get to the target that we have. the target that we have is really a function of a probability assessment of whether we get deals done in the lame duck or not. we haven't tried to set next year. i don't think we can do that until we know the election jaut

co outcome and where we're headed with tax reform. >> what is your price target for the year? >> 1395. >> for the s&p, you said it would be 100 points lower or should be 100 points lower? >> we were at 1330 all year and we think that's the right level given the deck sellration of earnings growth, earnings growth we should be at 1330, 1325. elections breed optimism. there could be upside to the 1395 but it depends on these events and catalysts for starting to resolve the huge structural problems we all know we're facing. >> barry, john, thank you both very much. >> thank you. coming up the battle to change the way people use computers but which company has the advantage in the tablet war and does it have a place in your portfolio? when we return. . comments? questions? send them to @squawkcnbc on

twitter, follow the show and look for updates from becky, joe, and andrew and the "squawk" staff. "squawk box" on cnbc and on twitter. between listening to the numbers... ...and listening to your instinct duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services.

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the steelers beating the bengals in the sunday night game on nbc, the cowboys getting by carolina 19-14, the new orleans saints beating the bucs 35-28 and the houston texans taking it to the ravens 43-13. in baseball the san francisco giants seem to have awoken from their slumber. the giants' ace ryan vogelsong struck out nine batters in seven innings. san francisco forcing a game

seven against the cardinals which will be played tonight. the giants in their last five winner go home games they've actually won. they've been an an incredible streak with this as joe knows too well. >> he had five strikeouts in the first two innings or something. he had nine total? and the giants were just tagging the ball. >> good news for the cardinals face, they've faced two game seven situations since 2004 and won them both. >> love seventh games, so great to watch. >> it's exciting. rutgers remains undefeated. the scarlet knights beating temple 35-10, looked scary in the first half but they're 7-0 and 4-0 in the big east, ranked 15th in the nagts, there are seven undefeated teams still out there, notre dame is one of them. ohio state? >> yes, ohio state came back. >> that's right. >> choosing the sports based on alumni and associations. >> we do cornell but -- oops.

>> didn't cornell lose? >> yeah, we're not -- >> it's a football club, is it really a football -- >> we're very good at hockey. that's where we excel. coming up, our guest host is betting on an economic recovery, the coo of las vegas sands joins us to discuss what he's seeing in the hotel business and why lv sands is betting big on a global economic recovery. and apple expects to unveil the ipad mini and microsoft's surface making its debut. which company should be in your portfolio? we've got the answer when we return. a, who's having a big tire event? your ford dealer. who has 11 major brands to choose from? your ford dealer. who's offering a rebate? your ford dealer. who has the low price tire guarantee... affording peace of mind to anyone who might be in the market for a new set of tires? your ford dealer. i'm beginning to sense a pattern. buy four select tires, get a $60 rebate. use the ford service credit credit card, get $60 more. that's up to $120.

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welcome back, everybody. in our headlines today it is official, bp is selling its tnk/bp joint venture stake to rsoneft, shares representing less than 13% of the russian company, this still needs approval. >> from the russian government. >> which is never absolute certainty so we'll watch this

one closely but the company is putting out the press release saying they are on board. canada blocking petronas' bid for natural gas producer. sales of nexen are down sharply by 10.5%. we have earnings coming in, joe? caterpillar giving us a number of 2.54 versus an expectation of 2.22, however, the outlook for $9, the $9.25 for the full year is below expectations of $9.40. the revenue number is also $16.45 billion, this is one of the things we saw last week that caused the trepidation on friday with mcdonalds and ge to a lesser extent after all was said and done, it was a weak revenue number, 16.45 versus 16.77.

the company sees full year at $16.77, and you saw the stock immediately trading lower on these numbers. previous outlook for sales and revenue for 2012 was 68 billion to 70 billion. they said 6 to8 to 70, and now talking 66 so they're saying 66 now and they had been at 68 to 70 so that's $4 billion less and we're talking about just one quarter being left, just the fourth quarter being left so. >> caterpillar has been open about the concerns they have and the global headwinds that are facing them. in fact the chairman and ceo doug oberhelman will be joining us in a half hour says in the release last quarter and a month

ago they talked about the economic headwinds facing the world and we are certainly continuing to see the uncertainties in the impact of our business. >> if you're wondering china or europe, the company says we believe that the eurozone is the most significant risk to our 2013 economic outlook. >> remember when they talked a month ago about 2015 all sitting out that far. here are more comments, we're focused on being nimble and taking actions to respond to the current environment at the same time keeping our 2015 goals and expectations in mind. not any additional growth there but it's hard to see how somebody can see all the way to 2015. we heard from barry knapp saying they can't figure out how to come up with a price target for next year on things. caterpillar has longer lead time when they have orders and know when things are planned out. >> based on the economic forecast the preliminary outlook for 2013 is the same for 2012,

in a range up 5% to down 5%. >> which is well below what the street is looking for $9.94. >> that's revenue, they said revenue, yeah. >> that's on earnings, but this is on -- >> they're saying this for sales and revenue, could be up 5% to down 5%. >> this is a weak revenue number in the current quarter and cutting its outlook but the stock is not bad right now at all. >> did you see the revenue for 2013 where it is? it's 19 billion versus the 17 billion that's expected for this year. >> yeah, so now it's going to be flat. >> big chop. >> they're taking it down, that's the big issue here. >> that's for what, becky? >> for 2013 the revenue expectation. >> no for 2013 for the full year. >> right. >> no, it's 67 billion was what it was for this year. >> i'm looking at the fourth quarter, sorry, you caught me on

that, 67 to 70, to from 70 to 67 roughly or 66, something? >> yes, but you know what? and i've seen caterpillar in the past, after last week i don't know whether people already figured this was going to be the case. i'm sure some of this was already baked into the shares. we'll have doug oberhelman on and he'll give you the lowdown at 8:00 a.m. concern about the fiscal cliff continues to grow, business leaders like our guest co-host are calling for leadership to keep us from going over. michael leven is president and chief operating officer of the las vegas sands and also a member of the job creators alliance, and it's great to have you. good to see you. >> good morning, everybody. >> most people know about sheldon adelson and his contribution answer how he feels in terms of what's coming up in the election. you're of a similar mind thinking about who would be better for the country in the next four years? >> well i think it's pretty

obvious based upon not only sheldon's contributions but the position our company has usually taken to support a free market situation. we absolutely believe that the republican candidate represents more free market kind of environments and would be good for everybody from an economic standpoint, as well as everything else. >> steve wynn goes off. we had him on not too long ago, he feels the same even though he's a lifelong democrat and close confidant of harry reid. are you a friend of harry reid as well? >> no, not a friend of harry reid's. i haven't met him. i think sheldon likes him as a person, but doesn't like his politics, and we have not been vocal about the harry reid situation in nevada because he's so important to the state of nevada, but i'm certainly not a supporter of harry. i think sheldon adelson grew up as a democrat. i grew up as a democrat. we come from democratic

backgrounds and steve has been more vocal against the president. sheldon is more vocal for the republican positions and that's where we pretty much stand. i think business people -- >> who changed? did you change from -- or did the democratic party change? >> i think the democratic party changed. i go back a long time, i grew up in boston, my grandfather was a supporter of john mccormick in the '20s, longest running chairman of the house of representatives. >> democrat. >> democrat. i was a kennedy democrat, sheldon and steve was a kennedy democrat. i think when i watched the democratic convention this time, what i saw was a real difference than what we believed the democratic party was year ago when we were kids and years ago and even when we were young adults and so is the republican party changed. the republican party we viewed as young people as the party of the rich and the established, and i think if you look at the

speakers at the republican convention, you would have seen speaker its who come from -- >> maybe you have just become rich and established and that's why it makes more sense now. >> that's an interesting question, but i don't think so. i think really most of my contemporaries who believe in that particular political position i think are proud of what america has given them as an opportunity and they want to see that for others and we build a lot of jobs for other people and we are i think most of us, including steve, sheldon in particular, very charitable, gives away a ton of money, and helps a lot of people. you've had hosts here from ken langone and bernie marcus, who are close personal friends of mine, they represent i think the best of what america has to offer and i think you see these people who are, by nature, very wealthy but haven't forgotten where they come from and haven't forgotten what the country has done for them. so i think that's why their positions are so vocal in terms

of this particular situation. >> i guess we need to separate the rhetoric from the actual, the initiative is pursued by an nation. you talk about a negative view of making profit. i've heard the stuff that the president has said about profits but i can see after maybe, after the financial crisis and you know the perception of what got us into that, i can see how maybe you'd want to pull it back a little, the greed on wall street perhaps, you'd want to say a few things but then if corporate profits continue to rise and they're at, corporate profits are pretty good so the left could make the case that the president's been pretty good to business, the market's at a five-year high, corporate profits are flush and the rhetoric was something that needed to be said but you think the actual regulations and other things are more to blame. >> well i think you can't pick a specific situation and say

regulations are to blame, big government is to blame, big business is to blame. i think our societies have a particular problem that we have to confront not only in the united states but globally. i go everywhere. i go to japan, i go to korea, i go to europe, to spain, i go to vietnam, i go to singapore, i see those societies and i see what's happening and in most cases you find a significant amount of youth unemployment almost everywhere, it depends on the numbers, much higher in spain than in other places but even in korea last week when i was there they're talking about 200,000 college graduates with no jobs. the end result is that developed countries have moved forward enough to educate an awful lot of people so that there are no jobs for them, and so these problems are indemic. so it's not what you're asking for is a simplistic comments that regulations and government are the problem. the fact is society has a problem, it has a developing problem and the only way we believe that you can solve those

problems is to create work and jobs at every level. our business is very good, because when we go somewhere, we create tons of jobs, at every level, entry level, at housekeeping levels, room clerk levels, and then supervisory levels and accounting and i.t., and executive management. so we have a business that really creates. so does caterpillar that you were just talking about before. it's a big manufacturer, but it creates enormous trickle-down in terms of what they do, so the world, not only the united states, but the world needs commitment to solving these kinds of problems, or you have a very, very disgruntled youth, and a disgruntled youth means that societies politically will crumble and it's happened in the past. so i think you're right, joe, i think there's a lot of rhetoric about a lot of stuff but at the end of the day, people have to vote for what they think is going to be best first and foremost from an economic standpoint, and i think what's happened is, we bifurcated the

country into those social issues on one side and economy on the other side. and i would prefer, i would prefer to have a middle. if you ask sheldon and if you ask steve wynn, i don't want to quote steve because i don't know him well enough but i believe he'd say the same thing. he's a social liberal. he's pro-choice, pro-stem cells, doesn't care about gay marriage, but he'll fight for the economic environment. >> frustrating there's not much middle ground to be found anymore. >> it's frustrating to me to be honest because i think we need to have, i don't want to say a third party scenario but we need to have the great majority of intelligent people want to handle both of those. they do not want an extreme position on the right and extreme position on the left. we're stuck in the rhetoric and frankly, i think mitt, knowing him and knowing the family, is much more towards the center

than the candidate on the other side or the president for that matter. >> we're going to, you're going to be sticking around and we're going to sneak in a quick break. >> as long as you're going to have me here, i got up early enough to be here. >> you're not going anywhere but thank you for that. coming up we'll talk about a full blown war breaking out over the future of computing, we'll look at company strategies and talk about the best fit for your portfolio, coming up next and at the top of the hour, a first on cnbc interview with the ceo of cater piller, doug oberhelman. "squawk" is back after this. [ male announcer ] at scottrade,

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welcome back to "squawk" this morning. tech giants are taking the tablet war to new levels with product launches this week. joining us now, and i got to admit, i love this guy, i've never met him in person but i've gone to his blog forever and i can't believe he's here, jonathan geller, president and editor-in-chief of bgr.com, also known as boy genius, a bit of a boy genius and joining us from nashville, tavis mccord from raymond james. tavis, i love you, too, i don't want to not give you the love but i've been reading this guy's blog forever.

you have a nexus tablet and an ipad mini will be competing against this. your take on this device? >> it's a good tablet, it's great for the money. >> 200 bucks. >> lets someone jump into the android experience. it's okay. it's a decent tablet but what everyone is focused on is the ipad mini, possibly same price or not but that's going to be the competitor here. >> this thing is very tiny and if you're a woman i could see putting this in a bag or a purse or something. >> i like that. >> the question is, i've played with it, it's so tiny that i'm not even sure it's worth it, meaning do you think these small devices are actually going to become a big part of the market? >> when you take apple as a company and realize what they're doing as far as user experience the difference is screen size. while this is a seven inch tablet the ipad mini offers 40%

screen size. tap targets, hit different buttons it's not a great experience. that's what apple is trying to perfect. >> tavis, who is the winner? >> i think from a financial perspective clearly apple. we're talking about some modest success with the google nexus and amazon's kindle fire at $199, but these are basically devices that are sold at or near cost so the monetization of those sales is pretty questionable. apple's generating over $30 billion a year in operating profits from its mobile platforms so financially there's no question. >> tavis, microsoft also has its surface tablet coming. mark benny of salesforce.com over the weekend was quoted saying he thought the microsoft windows 8 not just on tablets but on computers broadly is a huge loser in his mind and is actually going to be the end of the windows dominance. your take? >> yeah, i think that's probably a little bit overstated but i think microsoft and its partners

have issues in the tablet space. unlike in smartphones apple did not leave a pricing umbrella to easy copycat products and bring them to market at a lower price. apple doesn't have to pay an os license, makes its own processors and the biggest buyer in the world of the main cost component so if you're a dell or any of microsoft's partners it's hard to figure out how to make a high quality product and get it to market for the same price as the ipad. >> have you played with it? >> unofficially i have. >> does that mean people will adopt it in droves or scared of it? >> it's confusing because of how microsoft is structuring this. they have a tablet that can't run windows applications. a lot of people will buy the windows rt tablet, it's manufactured by microsoft, this

is the first time microsoft is competing with their oems so this is a big deal for the ecosystem but it's confusing. you can't run internet explorer and windows desktop, you can't run quick books. you have to use it like you would an ipad so it's confusing for the consumer. >> final question, this doesn't have to be the final question but this is for becky. the reason i know jonathan i used to go to his blog all the time because he had everything on blackberry, r.i.m., like beforehand, miles, years ahead of people. does this next blackberry, does it ever come back? is joe going to, we all, everybody here wants to know, we really do. it's sort of sad, actually. >> they're trying. they're doing a really major undertaking at the company, they're restructuring everything, have all their ducks in a row. >> is it good or bad? >> it's decent. it's going to be tough for them to regain their market share at the end of the day, even if they had a great product it would be very hard for them. >> i was talking about it over

the weekend you take the iphone and don't turn it sideways, you can't do an e-mail. >> i bet this guy can. >> you can in. >> yeah, of course. >> tiny little thing? what if you were drinking the night before. i'm like a little shaky. >> i have little fingers, too. >> i feel like we're showing our age here. when we come back, caterpillar reporting a short time ago weaker than expected guidance giving investors a reason for pause. barry knapp points a lot of this has already been out there. new things investors are digging through, ceo doug oberhelman is come up at the top of the hour. this wednesday a special "squawk box" event, warren buffett on the economy, the election and avoiding the fiscal cliff. two hours with one of the world's richest men, buffett, "squawk box," wednesday. starting at 7:00 a.m. eastern. rise above.

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i was downstairs making coffee, and we heard it. it just came crashing through the roof, out of nowhere. what is it? it's our ira. any idea what coulda caused this? maybe. i just sorta threw a little money here, a little money there. and i loaded up on something my dentist told me was hot. yeah. ♪

you're looking at some stocks to watch this morning, maybe i will pick a game on friday, becky. i got good advice from your husband. >> which is what? >> colorado is getting like 45 points, maybe i should take -- >> has points? >> caterpillar reported, we're going to talk to doug oberhelman

in a second, revenue guidance was 16.45 versus 16. 6 and the guidance is a little weak in terms of revenue for this year and for next year so we'll see it down not too bad, 1%, but you can see if you just look over the last six months or eight months, what's happened to the stock. bp is out now agreeing to the terms to sell its tnk, bp shareholding to rosneft but we have to get approval from vladimir, we'll see whether he likes that or not. vf corp. third quarter 3.52, above expectation at 3.49, revenue slightly below and guidance is not bad for next year although the stock is indicated sharply -- actually looking for 9.50 next year versus -- yeah, 9.60, reaffirming for next year.

bb&t corp. upgraded to buy from neutral at citi. and sandisk downgraded to sector perform from outperform at rbc capital. >> are you taking south carolina versus florida? >> that was a stupid pick. that was not gutsy. makes me look bad, made the animal orchestra look bad. colorado is getting 45 1/2 points. >> wait a second do you get the points when you pick with the animal orchestra? >> oh, yeah. >> i thought it was supposed to be straight up and down win. then we're taking whoever is playing colorado. >> can notre dame hang with oklahoma? >> huge question. we'll see. >> maybe they can but this is a test this week and byu is a trap game just like temple with you. >> yes, it was. we almost -- well we did very well in the second half. coming up a first on cnbc

interview with the ceo of caterpillar doug oberhelman. "squawk" will be right back. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused.

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dow component caterpillar reporting, pcat chairman ceo dog oberhelman will talk jobs, the economy and the election. the wall street water cooler story greg smith's tell-all book leaving a lot to be desired. ♪ am i a man or am i muppet ♪ am i a muppet >> inside the culture of goldman and bring you video from greg smith's "today" show interview. and the first read on the third quarter gdp is all set to hit the tape this week. we'll tell you what to watch as the third hour of "squawk box" begins right now. ♪ it's been one week since you looked at me ♪ ♪ five days since you laughed at

me saying ♪ ♪ get back together, come back and see me ♪ ♪ three days in the living room ♪ ♪ i realized it's all my fault but i couldn't tell you ♪ welcome back to "squawk box," first in business worldwide, i'm joe kernen with becky quick and andrew ross sorkin. our guest host michael leven, coo of the lay vass gas sands, and member of the job creator alliance. becky has your headlines. rot northwest will be paying $17.1 billion in cash and shares, the agreement will give bp a 19.75 stake in rosneft and two seats on the board. separate deal offers an exit for the other shareholder aar. russian president vladimir putin giving his agreement or his blessing to the agreement saying this is a good deal at a good price. and lance armstrong has been stripped of his seven tour de france titles and banned from

the sport for life. today the international cycling union ratified the united states anti-doping agency sanctions, this was expected but still probably a huge blow to armstrong. let's get a check on the markets. we've been watching u.s. equity futures and they had been higher throughout the morning. the dow futures are still higher but only up by 4.5 points. the s&p futures have just turned negative. the nasdaq futures up by five points. overseas in asia you saw green arrows across the board. the hang seng up by 145 points and in europe to this point we'd been seeing things that were right around the flat line and that still stands there, the ftse up by 4 points and the cac in france up by 5 points and the dax down 9 points. caterpillar revenues slightly shy of expectations but it's the outlook for the rest of this year and next year that has people wondering and the stock's down a little bit, but not much, because a lot of this obviously

we're not telling anything you don't know about europe or the rest of the world. joining us is ceo dug oberhelman. great to see you. thanks for joining us. >> good to see you, joe. how are you guy this is morning? >> we're hanging in there. we're hanging in there. if you had to pick china or europe for giving you a harder time to sleep at night, it seems like you're saying europe at this point, right? >> we see china recovering a little bit in 2013, and europe we just see it kind of struggling along like it's been. i don't predict a recession anywhere in the world at all in 2013, but europe is a one where there are so many political unknowns, it's hard to see how that's going to end up. we sure see china pass the bottom and i'm optimistic about china in 2013 actually. >> no place is going gangbusters. doug you mentioned australia, because of china, that's going to be sort of weak growth. japan, who knows what will happen in japan. here in this country i thought

the housing industry was doing a little bit better. i figure this is a bright spot here. is it? >> well, it is a bright spot, we're definitely past the bottom. i meet with contractors all the time and every once in a while we'll hear about a new subdivision here, new subdivision there so it's coming but we need a lot more, you know, we need that housing start number to double to really start to move the economy. it's going to be a while after that happens. >> wow. >> going back to your point nothing is really booming around the world. having said that i am very proud of this company and the third quarter and 2012. remember for 2012 over 2011, full year, we're still going to be up 10% in sales and revenues and 23% in profit. i'm thrilled with that performance, and inside our four walls at caterpillar our operations are really humming, they're going great. >> but something changed between when you made some of the estimates for revenue in 2013, something changed a little bit,

and also remember a couple of weeks ago you went out a couple more years and ratcheted things down. what changed? >> we saw a weak 2011 and world gdp growth and weaker than we wanted in 2012, and that's why we adjusted 2015 and for that reason alone, we brought it down a little bit but remember we have a wide range out there in 2015. >> how about 2013? >> profit per share 12 to 18. for 2013 we said it would be flattish, up or down 5%, but with all the uncertainty there is at this moment, i think that's a realistic way to look at it. there's lots of things that are just unknown right now, and maybe in 30, 60, 90 days some of that will start to clear up and we'll know better. right now that's the best we can see in our crystal ball. short term is tougher to forecast than long-term i think, joe. >> is this more uncertainty about the rest of the world or uncertainty about our situation here in terms of the election

and regulations and everything else? >> i think it's all of the above, and right now we're going into an election, there's a lot of uncertainty on that. there's a lot of uncertainty about the fiscal situation in january of next year. china seems to be on the edge of some recovery but we haven't seen it yet. we think it's coming and europe is really at this stage no good news or bad news, kind of limping along. so when you have worldwide growth at 2.5% or so, and u.s. growth at 1.5%, it's really hard to see where we're going to go without a lot of the uncertainty in the next 90 days. i'm hoping that will clear up as we go into the wintertime but we'll see. >> doug, you mentioned that you don't predict recession anywhere in the world in 2013 but if we were to go over the fiscal cliff in the united states would that change your view here? >> it would not help, becky. we are not forecasting that. i still believe in the end that somehow, some way, that

political leadership will find a way to get through that, kick the can down the road or do something to avoid that. i really believe that, and i know there's a lot of talk in washington about not lettinging it happen but it could happen and that's another reason why we posted flattish revenues. >> if the can gets kicked does that change your expectations in terms of the additional uncertainty we'll still have hanging over us, doug? >> i don't think it does that much. it depends on how long they kick it, how far they kick it. we have to see what the kick is at that time as it is football season. >> michael leven has a question for you. >> doug, nice to see you. i got a cup offal of questions f i've got a couple of questions. we have 5% of our ebitda coming out of china and macau and about to undergo a major project in spain. two questions, first, what is

your commentary in terms of the political rhetoric about china? how do you -- you obviously are successful there. we think we're successful there. what do you think about all the talk about china bashing and how that affects america and how that affects your business and ours? >> yeah, thanks, michael. you have a great company, too, and i see that everywhere i go, certainly las vegas and in parts of china, but i'm hoping that all this rhetoric and china bashing and u.s. bashing to some degree over there is election season. these are two giant economies that desperately need each other. they're our largest creditor, they're our largest market. we've got to find a way to live in the world and i hope that come january, cooler heads prevail, but i will tell you that in the past, when economies are struggling and there's high unemployment and social issues it's easy to bash somebody else and i think that's what we're seeing now. cooler heads have to prevail. the two economies and countries need each other. >> i couldn't agree with you

more. we need china. they're our biggest customer today and we keep bashing it and i don't understand why somebody doesn't want to fix that and work with them. >> i agree with you. go ahead, i couldn't agree more. you're right. >> tell me about the fiscal cliff again, i have great respect for your career and having gone through all the chairs and getting to where you've gotten to, if you were in charge, what would you do with the fiscal cliff? >> i'd try to get everybody in the room and say usually what i do in a big negotiation like that is the doors are locked until it's done, and really what we need here, no matter how the election turns out, michael, we really need leadership by the legislature and the white house, and that's what it's going to take, and we've just seen back and forth and bashing and total gridlock and that has got to be solved, because that uncertainty is driving into the economy,

into our customers who are worried to spend their money because they don't know what's going to happen. none of us know what's going to happen. i can't predict it and unfortunately you guys can't predict it either. until we get that behind us it's hard to make bull moves to get the economy moving. that's the bigger short term i think problem i see for sure. >> mike, i got a question for you real quick, you mentioned china. when you think about china, if you're upset about china bashing, you've also, you're also a big supporter of romney. how do you think about those two issues? >> i'm a big supporter of romney but i think china bashing is basically political. i don't think it's realistic. i think he's a businessman. i think if and when he gets elected i think his view on china will change because it has to change. you're talking about the world's two biggest economies, and if you look at what's going on, the reality is the world cannot be satisfied unless both the united states and china are successful economically. >> hey, doug -- >> michael's exactly right and

i've got to believe this is electioneering. we'll see. >> doug you said housing starts, do you have any forecasts for that ever happening again or is that, were those numbers that were generated by easy credit and misguided government policies? in your planning, do you ever see construction getting baaing to where it was pre-2007? >> i do. and i absolutely believe it will. just because of household creation we have here today the bubble that we went through is being worked off, there's no question in my mind that housing starts will inch up, it's contingent on the unemployment rate and how many people are working and when that's solved we'll see housing starts back over 1 million, 1.2 million. we're not putting that in our plans because we don't see that happening in the near term horizon. >> what happened between you and the esteemed governor of

illinois, did he cut you a special deal so you didn't have to move your entire operation and all of your plants out there so everybody else has to deal with it, did you get some kind of a deal? >> we got, we didn't get any deal at all, joe, and we didn't ask for one and we didn't get one. >> you were going to move some of your plants. i thought you were going to move some your plants because of the peoria. >> we didn't move from illinois. we moved from other countries to other states in the u.s. but we didn't move anything out of illinois. we're going to build a new headquarters here. we have deep roots here, it's hard to move out. i talked to the governor and we're talking about the business climate here, got to change, he knows it. >> doug you mentioned in your last answer to joe just that you think housing starts and the return to housing and construction that, will turn when you see the unemployment numbers improve. we've talked to other people including warren buffett who say you'll see an improvement in the

jobless situation when housing starts to turn because that's a big driver of job creation which gets you into this chicken and egg scenario, which comes first? >> well, what comes first is an economic growth rate above 1.5%. the lowest growth rate we've seen in a long number of years in really i think in my lifetime it's been a very slow and anemic recovery, and as soon as we can get that clicking up into twos, we're predicting that a little bit for next year, 2% in 2013 for the u.s., we'll see some of this come back, both unemployment and housing starts and i think he's right, we're right, it's all going to happen about the same time but gdp growth is slowly, slowly coming along way too slow. >> all right, doug oberhelman, we appreciate it today. your stock's been ticking 83.25 down from 83.86 or so, i don't think anything was that earth-shattering at this point, given what we see coming out of

europe. >> well, i come back to how the company's operating and i think in the long-term that's what you have to do. you got to run it and be efficient and we're getting that part done. if growth comes we'll take care of that, too. >> a beautiful piece of machinery behind you. >> yes t is. >> it's a great brand name and great american icon. thanks. >> thank you, joe. becky, andrew. >> appreciate it very much. coming up, much more from las vegas sands president and coo michael lefb and former goldman sachs vice president greg smith's book about the bank's culture hitting shelves this week. we'll bring you video from smith's "today" show interview. as we head to a break here's what lloyd blankfein had to say about the book in his interview with cnbc on october 11th. >> i'm not really concerned about the revelations. i tell you i'm not looking forward to the hoopla around it, if the hoopla that greeted his

op. ed is any indication. there's not a lot to begin with, i haven't seen the book and i never talked to greg smith. scube great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade.

welcome back to "squawk box," everyone. let's get back to our guest host today, michael leven is the

president and chief operating officer of the las vegas sands and member of the jobs creators alliance, and michael, you talked about how important it is to really look at the election in terms of jobs. can you tell us just a little bit about how jobs are going in vegas right now and what's happened since the last election, what you'd like to see in terms of creating more jobs? >> i think vegas is an example of a couple of things, becky. first of all there was an enormous development in vegas around 2006-2007, created a lot of jobs, but the market didn't take place and hotels failed or stopped building and a lot of hotels had layoffs, a lot of casinos had layoffs. a lot of the jobs have gradually come back and the hotels and casino resorts survived but there is no real growth today. it's basically stable and the only way it's going to grow is if the visitation of vegas grows and the spend and the activities grow. the only way those grow is if the economy grows. so we're in what i call a flat,

stable kind of situation. think of i have gas a little bit like japan, in a sense. it's okay, but it's not going anywhere. so in order to go anywhere requires something injected which means a better growth in the economy, better income, more players, more people. >> it kind of goes back to what doug observerhelman of caterpil was saying. >> it's higher gdp but more often than that it is consumer confidence and income. the right tax policy that puts more distribution, disposal income at the people's hands and i was saying to joe before, i have a son that has a nanny, he's in new york city, he's a teacher, his wife is a teacher. they have a nanny so they can both continue to teach, the nanny makes $800 a week, takes home $600. $200 gone. now how could that person afford to give up $200?

there's something wrong with the tax policy that takes somebody making $40,000 a year and takes away 25% of their income just as there's something wrong with tax policies as romney and others have said at the high end, the deductions are inappropriate, it's inappropriate for somebody making millions to deduct the interest on their mortgage. it just doesn't make any sense. that has to be fixed. that helps the economy to grow because putting more disposable income into the system, into the system for young people, middle class people, they spend it, they grow the economy. and that's not what's happening in washington and that's what has to change in washington. >> that's what's so amazing about the sort of way that romney tax plan has been characterized by the media and others. you could take away deductions from the high end, it will affect those people in terms of millions and millions and millions and millions of dollars per person, and then absolutely

it will not favor the wealthy if you do that, and you keep a certain amount at the lower, down with people that, you know, let them keep 25,000, 18,000, whatever, that's a viable plan to capture some of the income that we're talking, that warren buffett is talking about that is not taxed at this point. it's a viable way of doing it. over the weekend there was a great piece, by the left doesn't add up, doesn't make sense and they haven't said anything. there's a way of making it work that could be put into practice that would be really, really beneficial. >> you have to have a tax policy that takes away special interests. >> right. >> and unless you're willing to confront the special interest. however t doesn't mean that somebody making $250,000 a year with $300,000 or $400,000 a year can't deduct the interest on their mortgage but it means somebody making $10 million can't deduct. that $10 million person is going to spend money no matter what. on the other hand, you fix that but i'd also keep dividends and

capital gains taxes low to get the wealthier people to invest and incentivize the economy. >> 20% to 25% for those instead of 15% for cap gains? >> no it's 20% for cap gains i think, i think it's 20. >> we're at 15 right now. >> i'm probably okay at 20, but what i'm okay at is incentivizing those investments, so tax me more on a rate basis, but give me dividends and give me incentive to invest for cap gains, because that drives the economy. so then also give the lower people more money. this idea that somebody $250,000 can pay more taxes is ridiculous. they're out of money at the end of the month now. when you get to the lower levels, frankly i don't believe anybody that makes less than $100,000 should pay any tax if you want to know my honest opinion, if you want to know why because they spend everything. the more the government grows in every place, every place,

states, cities, and the fed, the more they grow, the more they have to tax. and so at the end of the day, why is it that ten states with no state income tax do better than all the rest of the states? why is it? people don't get it. >> right, and we can't do it, we can see the way it works with states because the businesses and people moving in and out of state. when you do it at the federal level, that's why it goes abroad. >> texas has no state income tax, how do they do it, tennessee answer florida and ne nevada has no income tax. they manage to do it, it's amazing. >> more with mike until a second. coming up, aerngz season, economic data and the european recovery. is that in quotation market? "squawk box" will be right back. this wednesday, a special "squawk box" event, warren buffett on the economy, the election, and avoiding the fiscal cliff. two hours with one of the

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that powers sound decisions. duff & phelps financial advisory and investment banking services. when we come back we'll talk about the busy week for corporate earnings, 155 of the s&p 500 companies are expected to report. got a lot today already. tomorrow we'll get the results from three dow components,

dupont, 3m and united technologist on the docket. up next we'll look at the earnings reports we've gotten today and other data points likely to move the markets in the week ahead. right now as we head to a break, look at the u.s. equity futures they have turned down for the s&p 500 and the dow futures.

welcome back to "squawk" on this monday morning. u.s. genealogy website ancestry.com is to be acquired by permira and the european union's anti-trust chief saying spain's banks should be fully capitalized by 2013 suggesting eu regulator also clear plans by the end of next month. nissan is recalling 2012 and 2013 altima vehicles, nearly 14,000 vehicles are covered by the recall, the automaker says bolts could become loose and fall out increasing the risk of a car crash. not good. >> no, definitely not good at all. there was a problem with the torque, they need it tightened up is apparently the fix but

take it in if you have one of the cars get it in and fixed. after friday's sell-off investors are bracing for another volatile session and another week of rand mines. joining success michael darda, chief economist and chief market strategist at mkm partners and cio of nationshares, mike, why don't you start off telling us what you think about corporate profits. many of the people we've talked to have been disappointed with where we've seen earnings so far. >> absolutely, thanks for having me. top line growth has slowed, there's no doubt about that. the primary drag here has been the recession in europe, and the slowdown in china. the good news here is i think if you look at forward indicators, the indicators that anticipated this slowdown last year, they're going the other way, so we have financial conditions easing in europe, suggesting the recession turns into a moderate recovery there, and leading indicators also in china improving,

liquidity growth rates after a sharp deceleration are turning, credit markets are improving. so we think the outlook for next year is better in that this weakness on the corporate earnings front is really the lag reflection of a set of known knowns. >> what is a lagged reflection of a set of known knowns, meaning we knew things would be bad and knew they'd turn down and looking at the outlooks which have not been great either though. >> absolutely. so corporate executives are certainly cautious, that makes sense, but i think a lot of this is rear view mirror weakness, credit markets are improving in europe, liquidity growth rates are turning after a lot of deterioration last year so those were key leading indicators that warned of a double dip when the ecb catastrophically raised interest rates and contracted liquidity last year, so mario draghi's going the other way and for now his three-step is

working. >> scott the market is always forward-looking, several months down the road. at this point it's hard to see past november and january. you have to get to the election and the fiscal cliff. do you bet we'll have solutions to both of those and if that's the case, what do you think of the market? >> i think we'll have a solution to the fiscal cliff as far as europe is concerned. the incremental nature of the news we got today from spain anyway i think indicates that we're not anywhere close to a solution as far as europe is concerned, and i agree with michael to a certain degree but i do think that a lot of the weaks than we see now is not past news, it's forward-looking and the cat news today much of it was particularly disappointing. they've forecast out to as far out as 2015, and they're not looking really at great results there. they think that their growth there is going to slow down, it's going to essentially stop from a situation a couple of years ago where they had

outstanding growth and that's largely due to the fact that capex and mining is really, really hurting them, and that's a function of commodity prices. as far as our markets are concerned, every day is important, but today is going to be critical, because the s&p closed on friday right at the 50-day moving average and on friday the 12th, that was a floor on monday the 15th there was a floor and the market acted like it was jet powered and it went higher, so if we get convincingly below that level today i think a lot of people are going to throw in the towel and say hey we've had a pretty good run and we're actually going to take some money off the table. >> scott, what i will say about doug oberhelman of caterpillar when he joined us a half hour ago he said yes they have some concerns when they look at europe but also says he doesn't expect anywhere in the world will be in recession in 2013. is that better news than you'd been anticipating? >> well i'm actually struck by the fact that they have forecast so far out into the future. i heard him speak last thursday

night and he was more pessimistic than i think he is right now or sounds right now so i actually think that while the news out of china we've gotten recently is probably better than we had expected, it's not as good as we had hoped for and commodity prices will be a problem for lots of names including caterpillar, so i'm actually not very optimistic for the rest of our year anyway. >> and michael, we've got gdp coming up on friday. where do you stand on your expectations? >> it looks like it will probably come in close to the 2% threshold, give or take, you know, a quarter of a point. >> difference between 2% and 1.5%. we talked to other each looking at lower numbers. if it's 1.5% what do you think about the overall economy? >> i don't think it tells us much that the market already doesn't know. if you look at the disposition of financial conditions in the u.s., they're actually supportive of somewhat faster growth. we have housing coming back, sustainably from a low base, the commercial banking system

healing, those two things could take some pressure off the velocity of money and you have an open-ended fed policy now focused on a goal instead of the stop/go stuff with qe1 and qe2, so i think next year the outlook could be decent, 5% nominal, 3% plus real, that's the difference between an underlying job pace of 150k and say 200 plus, so let's not get too pessimistic here. >> michael, scott, gentlemen thank you very much. programming note, you can watch scott on "options actions" on fridays at 5:00 p.m. coming up, freg smithgreg s tell-all book on goldman sachs goes on sale today and don't miss warren buffett live wednesday, two hours starting at 7:00 a.m. eastern. ade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more

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some people say an investment bank being out to make money, where's the news there? what in your mind crossed the line at goldman? >> absolutely banks should be in the business of capitalism, making money but i think capitalism doesn't need to come with unethical behavior and i think once you start seeing unethical things, that's where you have to say this is not acceptable. >> the water cooler buzz street on wall street, "why i left

goldman sachs" that was greg smith on the "today" show, also doing "60 minutes" last night and the overwhelming response seems to be this guy doesn't have the goods, there's another tweet by this guy from minionville says i want to buy out of the money puts on greg smith, and i'd buy it on grant central publishing spends $1.5 million on this book without any real revelations. all of us were trying to get interviews with him and run around and all this kind of business and seems like the book's come and gone and it was all this buildup. now you're a goldman sachs client, right? >> yes, we are. right, we are. i think it's a puriant interest in people to buy a story that would be negative about goldman sachs because goldman sachs being the biggest bank i guess they're probably the biggest investment bank in the world, it's really easy to poke at them all the time. i think the real question of ethics in investment banking or whatever always comes up no

matter whether it's goldman sachs or anything like that, and i'd really like to know how he defines the ethical behavior and not the ethical behavior. it's easy to say capitalism should be ethical, whatever, and it's easy to say it's not ethical but what exactly is he talking about and people want to know that and i wonder if the book does that. >> i've read the book. sadly it doesn't do that. >> then it's not worth it. >> his argument, given your client, maybe you have a view on this, his argument is there are times not when the banker, when they're playing the role of banker and adviser, but in trading situations, that they're the counterparty and effectively are sometimes betting against their client or not advising their client for example they could be getting a better deal from so and so down the street. that's what he's saying. >> well i think we'd all say some of that stuff gets close to the line.

the question really is the line ethical or not ethical and who makes that judgment and i don't know that you can legislate ethics. people have been trying to do that for 5,000 years and you still have it. i think each individual carries their own ethics. i don't believe in the dealings we've had with goldman sachs in any way we have seen any unethical behavior whatsoever but once again we don't trade with them so i can't speak for the trading department. >> people often say that wall street at large is like a casino, you're in the casino business. do you fwhi? do you think it's fair? unfair? some people say the casino business is more regulated. >> we are very regulated but that's an interesting question. if you're buying stocks f you're betting on stocks and options and things like that, you can sort of compare it to a gamble. that's one part of wall street for sure. people who day trade of essentially gambling but with knowledge just like betting on football games, 44 points, whatever the points. i think there's much more to wall street than just the buying of stock and the playing of

options and what have you, so some of it is sort of casino like for sure. >> it's essential to a strong functioning capitalistic system to raise capital. it's kind of a weird -- is it gambling, it's kind of cliche. >> does he gamble at his own casinos? you said you don't gamble at all. >> i can't legally gamble at my own casinos. >> you can't legally gamble here buying stock. >> is that true you can't go to the tables? >> not in my own building i can't. i can go to tables in las vegas if i want to but i don't. >> you're crazy. he sees how they make their money. >> do you play the stock market? >> not usually. i think i'm an investor, i'm not a trader in the stock market. >> the house usually does pretty well. >> the house will win over time. it may not win that particular day, but the odds are in favor of the house, but strangely enough the odds are not enormously in favor of the

house. >> what is the best game to play, table game to play for odds? >> craps. >> for the player? >> is it craps? >> no, probably black jack is the best game to play, if you play by the rules and make the same bet all the time. >> there's a new sims game coming out, my son was showing me a 12-minute tape it shows you they're building a city and they start with land to where to do it and they decide where all the residential, industrial, commercial, but the guy on the tape decided i'm building a casino town and that's what the whole town is going to eventually be built around and works really well, you bring the train station to where the casino is, bring people in, set up the industry, set up the water and it's a casino, and it's a really good business. >> sims is an online game, with unof the things i asked during the commercial break was this idea what happens when the internet democratizes gambling. do you think people will still go to vegas in. >> people will go to vegas because vegas is an

entertainment city. gambling is only about probably 25% to 30% of the profits of vegas. most of the profits come from room sales, food and beverage sales and banquets. gambling is an amenity in vegas. the internet gaming and phenomenon with online poker, will we believe impact land-based casinos at a smaller level such as indian gaming and things like that that don't have major entertainment. >> like a foxwoods? >> foxwoods, it will impact foxwoods for sure, because foxwoods doesn't have, people don't have to drive. they can play in their homes, so they'll get impacted by it. the companies that own some of the facilities think that internet game something going to come, which we believe it will, and they will replace the profits from one for the other. >> you said you don't want to be in that business, the internet business. >> i don't think it will be profitable for us. i think the cost of entry, the number of entries into the internet gaming will be significant.

>> even with your brand? brand is going to matter in this, no? >> it's saying that but i don't think so. i think at the end of the day it's going to be a customer acquisition phenomenon, end up like the airlines where you are competing for customers at a higher cost of entry which will reduce the profits. some will make money. >> sitting in your basement gambling online, i mean the whole idea of it just depresses me. >> it does. it depresses me, too. what about sitting in your fraternity house or sorority house, anywhere. what about sitting in your office and doing it. people will be sitting in the office and doing it, and it's not a -- it's a very intrusive scenario. >> don't throw rocks in glass houses. viewers are sitting in their offices and basements trading stocks all day. >> viewers are trading stocks as we speak sitting there with the computer, it's the same exact thing you're talking about. >> the shows and the lights and the cars and the crowds and the excitement. it's vegas.

>> i don't think vegas loses anything to online gaming, but i will say foxwoods and mohegan suns, the small casinos, and even our place in bethlehem, pennsylvania, people can stay home and play why would they go unless they want the socialization. >> are you long or short on atlantic city? >> i'm short atlantic city for sure. >> we're going to continue our conversation with our guest host today, michael leven, when we come back. by the way you can't start your trading week without a healthy dose of jim cramer. we'll get you your fix when we head to the new york stock exchange. stick around. "squawk" will be right back. are you ready for the stock of the day? it's coming up, right here on "squawk box." between black and white answers... ...and 1,000 shades of grey duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services.

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let's get down to the new york stock exchange. jim cramer joins us now. i guess what i ask you, given friday and all the scuttlebutt over the weekend, and c caterpillar, is this something new or we know it? >> we know it.

there's a pervasive gloom. it's exactly what you want, night beat, good dividend and the stock was down. that knee-jerk reactions tells you, look, people are negative. they're going to ring the register on anything. you know something, joe, we're in some sort of quick funk here and we can't get out of it that quickly. i think it's overdone already. guys who want out of this thing real bad. >> revenues are nice, but the market itself, jim, is there some type of separation between where it should be and where it is because of easy money around the world or can it tread water and everything can catch up to it? because we're below potential. we can catch up to the stock market. >> i totally agree. when you go through the quarters last we're, i had the misfortune of reading these press releases, europe is not moving, china is

stalling. it's literally two out of three but the third take up all the slack. everyone's using that as an excuse. i'm beginning to think that's real. i'm thinking people don't want to order stuff because of the fiscal cliff. our emphasis on the fiscal cliff is right. >> then comes the cliff that comes after we solve the fiscal cliff, that's our own cliff, which is much more irretractable. >> some guys are able to deal with slower better, honeywell, some can't, parker hanafan. we've had so many positive cases each earnings period it's jarring to see each day to have someone say the wrong thing. now we say the wrong thing about vf corp because it's the wrong thing. tech is a disaster. i mean, tech is awful. >> jim, we'll see you in about

seven minutes or so. before we head to break, a story crossing wires. treasury department starting to sell off stake it holds in 11 banks that hold t.a.r.p. finds. the latest move in winding down the bailout in 2008. each of the 11 banks have submitted an offer to treasury to buy back their own preferred shares but other investors can place bids as well. >> wow. coming up, our guest host has been michael levin. we'll give him the last word after this break. [ male announcer ] you are a business pro. governor of getting it done. you know how to dance... with a deadline. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. this is awesome.

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tonight round three. after the dust has settled from the final presidential debate, we'll bring you the highlight, the best lines and the reaction from investors and strategists. plus, earnings reports from major companies with the potential to move the markets. dupont, 3m, united technologies and u.p.s. set to report before the opening bell. you can't afford to miss "squawk box" starting tomorrow at 6 a.m. eastern.

dow component, caterpillar, beat expectations but the world's largest maker of tractor andth of my moving equipment slashed 2012 forecasts for the second sim this year, 2013 may be slower as well. global economy is weaker than previously expected in both europe and china, but seem to be more sanguine about china that europe. >> let's go to michael levin. fear is permeating through businesses and through consumers these days. >> well, i think the last word on that, becky, sis that companies are afraid, people are afraid. there's an uncertainty and fear of what will happen with the fiscal cliff. there's an uncertainty about the election and an uncertainty about the future of the united states and the exceptional country we grew up in.

until that settles you're going to have a lot of doubt on financial markets, sitting on the couch, not spending money like they should. until we get tax policy, economic reform that keeps us growing, i think that fear's going to continue. people have to understand that the united states economy is the single most important thing in the world economy. nothing's going to happen in europe or china that's favorable unless we fix our house. that's what we're worried about. >> the fear factor has kept companies sitting on cash. but you point out that las vegas sands is investing no matter what. >> we're investing because my chairman doesn't fear anything. he has a great belief in the united states and other economies of the world, china and europe, and we're going to continue to do it. i think we're exceptional. he has to do that, have i to do that, and it's always opposed by

all those others around us who tell us not to do it. >> is sheldon prepared if the president is re-elected. >> i don't want to do it if romney loses. i don't want -- i'll have to hold his hand. he's so emotionally and intellectually committed to a romney win that -- >> would he do different things as the person behind las vegas? would he cut back on things? would he not be as aggressive in expansion? >> i can't speak -- i don't know. my guess is that sheldon will continue to go on and continue to win, but i think he'll raise a little bit of a yellow flag, a little bit of a yellow flag because -- >> not white flag? >> no, not -- sheldon will never raise a white flag. he's not that kind of guy. he's fought every day for his whole life and he's been successful because of it. i just end by saying, i say this all the time, sheldon loves this tr